Friday, December 30, 2016

A more recent version of this article was published on ChinaFile, http://www.chinafile.com/viewpoint/origins-of-chinas-new-law-foreign-ngos.

Prologue

In March of
2013, Xi Jinping was named the President of the People’s Republic of China at
the 12th National People’s Congress (NPC). At the time, I was
working for China Development Brief, an independent Chinese NGO started by the
British journalist Nick Young in 1996.

I remember that
month well because we were busy preparing for the launch of our directory of
independent Chinese NGOs and a report on public advocacy in China. That event
was a celebration of the substantial growth in independent civil society
organizations over the last decade. It was also a coming out party for CDB
which had assumed a low profile after Nick was denied entry back into China in
2007 for reasons that have never been made clear. Nick’s English-language
website stopped posting content a short time afterwards. The Chinese CDB team
continued to publish a Chinese-language quarterly covering civil society
developments in China, but did not issue any new directories or special reports
or organize major public events. The last NGO directory CDB had published was a
directory of international NGOs in 2005, and before that a directory of Chinese
NGOs in 2001.

To promote the
new NGO directory and advocacy report, we held a day-long Civil Society Forum
in the U.S. Embassy’s American Center. We invited over a hundred
representatives from independent Chinese NGOs, foreign NGOs, diplomats,
scholars and media, and asked several Chinese NGOs to speak about the
significance of the directory and their advocacy experiences in China.

We were anxious
before and during the event because it was taking place 10 days after the close
of the NPC session. Generally it’s not a good idea to organize large civil
society gatherings in China, let alone in the capital one week after Xi’s
coronation. Given the heightened security presence, we encountered difficulties
and delays in the printing of the directory. One printing company pulled out
when the police showed up unannounced at their office, so we approached a
company located further outside Beijing that agreed to publish it. I remember
the copies not showing up in our courtyard office until only a few days before
our event.

Despite our
fears, the Forum was a success. It was standing room only, we did not run out
of food, the simultaneous interpreters performed admirably, and the police did
not show up. Or if they did, they did not announce their presence.

That spring now
seems like a distant memory, much like the week-long blue sky days that appeared
over Beijing during the Olympics. Little did we know that two years later, the
environment for civil society would change dramatically, that a number of the
Chinese NGOs that attended the Forum would be subjected to harassment and
detention and some would leave the country for safer havens, and that a
draconian law placing foreign NGOs under police supervision would be passed.

Introduction

Since
China opened its doors to the outside world in the late 1970s, thousands of overseas
not-for-profit NGOs have carried out programs and activities in China,
contributing to China’s development and engagement with the rest of the world. These
NGOs run the gamut from trade and commercial groups like the U.S.-China
Business Council and European Chamber of Commerce to universities like NYU and
Stanford to foundations like Mercator and Ford to performing arts groups like
the Philadelphia Symphony to think-tanks like Brookings and Carnegie to sporting
associations like the International Olympic Committee and the NBA.

No
one really knows how many of these organizations are operating in China, but
the numbers are substantial. In 2005, China Development Brief (which also
started as an overseas NGO) published the first directory of international NGOs
in China listing around 200 selected NGOs. Since then, estimates ranging from 1,000 to 7,000
have been provided by Chinese and foreign scholars that include both overseas
NGOs that have an office in China and those carrying out programs and
activities in China from their overseas offices[i].

For many years, the vast
majority of these NGOs operated quietly in China in a grey area. Many are
unregistered and work in China through local partners, while others are
registered as a representative office of a company. That will all change with
the passage in April of the Law on Administration of Activities of Overseas NGOs in the Mainland of
China (hereafter Overseas NGO Law) which goes into effect on January 1, 2017. The Law is the
first comprehensive regulation of its kind covering all overseas NGO activity
in China.

The Long Road to Regulating Overseas NGOs

Prior
to the Law, the Chinese government had taken halting, incremental steps to
regulate foreign NGOs. The first came in April 1989 in the form of the Provisional
Regulations for Foreign Chambers of Commerce that allowed chambers of commerce to
register with the Ministry of Foreign Economic Relations and Trade (MOFERT). Foreign
NGOs that were not chambers of commerce had to wait another 15 years when the 2004
Foundation Management Regulation made its appearance. This regulation was issued
by the Ministry of Civil Affairs (MCA), the government agency responsible for
regulating “social organizations” (China’s official term for NGOs), and was
primarily intended to promote the development of Chinese foundations. Yet it included
for the first time language on the registration of representative offices for
“overseas foundations”[ii].
Overseas foundations and NGOs were
allowed to register a representative office in China under a stringent “dual
management system” in which an NGO first needed to get approval from a
Professional Supervisory Union (PSU) in a similar field (essentially a
government sponsor) before it could register with MCA.

The Foundation
Regulation had a very limited impact on overseas NGOs: only a handful succeeded
in registering primarily because most were unable to find a PSU. These
fortunate few included operational NGOs like the World Wildlife Fund, China
Medical Board and World Economic Forum and grant-making foundations like the
Bill and Melinda Gates and Li Ka Shing Foundation. By 2015, the number of
overseas NGOs that had registered a representative office numbered a mere 29
out of the hundreds of overseas NGOs with offices in China.

In
early 2010, as part of a series of local policy experiments intended to improve
the regulations of NGOs, the MCA launched a pilot program to register overseas
NGOs in Yunnan.The “Yunnan Province
Provisional Regulations Standardizing the Activities of Overseas NGOs,” required overseas NGOs to “file documentation” (bei’an) about all their partners,
funding and activities in Yunnan with the provincial Civil Affairs and Foreign
Affairs departments.
By December 2010, around 140 overseas NGOs had registered under this regulation
and by 2013, MCA leaders were touting the Yunnan regulations as a model for
national policy. This was also the year when Xi Jinping was anointed President
of the PRC and the approach to regulating NGOs suddenly changed.

Xi Jinping’s New Governance Approach

Xi
Jinping’s rise to power coincided with a new governance approach that focused
on strengthening national security and “governing the country according to law”
(yifa zhiguo) as ways to rejuvenate Communist
Party rule. Already in the spring and summer of 2013, a major crackdown on
activists, lawyers, bloggers and journalists was taking place to head off
potential threats to social stability. By the end of 2013, a National Security
Commission (NSC) headed by Xi Jinping was established. In early 2014, reports
of overseas and Chinese NGOs working in Tibetan areas being closed down began
to surface. In April of 2014, the NSC held its first meeting and a month
afterwards ordered a national survey of overseas NGOs operating in China.

During the 2014-16 period, a major anti-corruption drive launched by President
Xi gathered momentum along with the repression against NGOs and human rights
and labor activists and lawyers. Several foreigners who had been working for
Chinese and overseas NGOs were evicted in 2015 for working on improper visas,
and in January 2016 a Swedish citizen – Peter Dahlin – appeared on state-run
television where he made a forced confession to working for an organization that supported
Chinese human rights lawyers. These troubling developments were accompanied by
the passage of several new security-oriented laws one after another in 2015 and
2016: the Counterterrorism Law, National Security Law, the Overseas NGO Law and
most recently the Cybersecurity Law.

The Overseas NGO Law Surfaces

The
first sign of the Overseas NGO Law came in December 2014 with the announcement
that the NPC Standing Committee was deliberating the first draft of the law.
That announcement caught many observers by surprise. Before this, MCA had been
taking the lead on drafting regulations for overseas NGOs, using the Yunnan
regulations as the basis for national regulations. In the case of the Overseas
NGO Law, a draft of a national law was being proposed, not just a draft of a ministerial
regulation like the one in Yunnan. More importantly, the announcement of the
draft law was being made by the Vice-Minister of Public Security who stated
that the registration and management authority for overseas NGOs would now be
vested in the Ministry of Public Security (MPS), not the MCA. He noted that the
regulation of overseas NGOs had been raised as an urgent issue at the Third
Plenum in October 2013 and the Fourth Plenum in October 2014, and that the MPS
had been working with the MCA and other departments as early as April 2014 on
researching and drafting the law. The mention of April is significant because
it coincides with the first meeting of the National Security Commission and
suggests that the decision to make MPS responsible for regulating overseas NGOs
was made at that meeting.

The Drafting and Substance of the Law

The
first draft of the Overseas NGO Law was not made public, but an English
translation quickly circulated. That draft was quite draconian. It gave
overseas NGOs only two ways to operate legally in China. One was for the NGO to
register a representative office, which required getting approval from a
professional supervisory unit (PSU) working in the same field as the NGO, and
then applying for registration with provincial Public Security departments. For
NGOs that did not want to establish a representative office but only wanted to
carry out projects and activities in China, the second option was to register
for a “temporary activities” permit lasting one year.Applying for a permit would also require
jumping through a series of hoops, namely getting approval from a PSU,
collaborating with a Chinese partner, and then applying for a permit from the
relevant Public Security department. The draft law stated that overseas NGOs
that did not follow one of these two channels would be operating
illegally.

There
are a number of signs that point to a clear national security focus behind the
drafting of this law. One was the transfer of registration and management
authority from MCA to the MPS. Another was the MPS Vice Minster’s mention of
April 2014, the same date as the first meeting of the National Security
Commission, as the time when research and drafting on this law began. A third
can be found in the language of the draft which has a stronger security
emphasis than the Yunnan regulations.

At
the same time, parts of the law are influenced by the Yunnan regulations
developed by MCA[iii].
It uses the same term “overseas NGO” to refer to “…non-governmental, non-profit
or public interest organizations that have been legally established overseas.”
It preserves the “dual management” system which requires overseas NGOs to get
approval from a PSU, although the PSU plays a somewhat different role in the
Yunnan model. It also incorporates a similar “document filing” (bei’an) system for overseas NGOs to
report on their activities, partners and funding.

We
can also learn something about the law by examining its evolution from the
first draft to the final version that was passed by the National People’s
Congress in April of 2016. As is the norm, the law went through three drafts
before its passage. The second draft, issued in early May of 2015, was the only
one publicized to solicit comments from the public.

The
revisions made in the later drafts reflect MPS recognition that certain
provisions were going to be administratively burdensome, and changed them to
streamline the process. The most significant example was the simplification of
procedures for NGOs carrying out “temporary activities.” In the first and
second drafts, NGOs would first need to get approval from a PSU, and find a
Chinese partner to collaborate with. After that, it still needed to apply for a
“temporary activities” permit from the relevant Public Security department and
wait for their approval. After receiving public comments about the draft, the
MPS dropped the requirements for PSU approval and Public Security approval for
a permit in the final version of the law, and only required that NGOs work with
their Chinese partner to “file documents” about their “temporary activity”. In
other words, in the final version of the law, NGOs carrying out “temporary
activities” only had to inform the
relevant Public Security department about the activities but not wait for
approval.

In
other instances, the MPS realized that certain procedures and requirements
either overlapped with, or conflicted with, procedures and requirements in
other laws and regulations. The first draft, for example, prohibited NGOs from
having branch organizations but when it was discovered that some science and
technology NGOs already had branch offices, the final version of the law
allowed for branch offices “specified by the State Council.” Similarly, the
first draft only allowed NGOs to register one representative office in China,
but later drafts removed that limit although no language was inserted
explicitly stating that NGOs could register more than one representative
office.

The MPS
also removed articles in the first and second drafts that allowed overseas NGOs
to set up domestic NGOs, realizing that this could be used as a loophole giving
overseas NGOs a channel for working covertly through these domestic NGOs. Given
that domestic NGOs are regulated by MCA through a different set of laws and
regulations, these articles would also have raised questions about which
ministry would be responsible for supervising these domestic NGOs.

The
amount of time it took to get from the first draft to the passage of the law is
also telling. It took a total of nearly 16 months, 11 of which were spent
digesting the many public comments made to the second draft and preparing a
revised draft that was passed by the NPC Standing Committee in late April 2016.
In comparison, the Counterrorism Law took 13 months, the National Security Law
eight months, the Charity Law six months, and the Cybersecurity Law 15 months.
The lengthy drafting process of the Overseas NGO Law was likely a product of
several factors: the unfamiliarity of the MPS in regulating such a diverse set
of organizations and the challenges it faced in processing the public comments;
the need to coordinate with MCA and other relevant agencies on the revisions;
concerns about the draft law raised by foreign NGOs, businesses and
governments; and perhaps even infighting among agencies and groups with
different views on the law.

The Law’s Intent and What NGOs Can Do

Two
observations emerge from this examination of the Overseas NGO Law’s emergence and
evolution. One is that Xi Jinping’s rise to power and his concerns about
China’s security environment was the major driver behind the law’s
establishment and timing. The second observation, drawing from the revisions
made to the different drafts of the law and the length of time spent in the
drafting, is that the law is being taken seriously by Chinese leaders as a
governance tool to strengthen “law-based administration” (yifa xingzheng), recognize the role played by overseas NGOs in China’s
development, and strengthen their regulation. In this sense, the law can be
seen as part of Xi Jinping’s broader “governing the country according to law” (yifa zhiguo) campaign to improve Party
discipline and governance over both the Chinese state and society. By strengthening
regulation of a group of social actors associated with foreign values and
agendas, the law is intended to provide legal channels for those actors to
carry out their activities while also better protecting China from external
threats. But another intent of the law, I would argue, is to require more
transparency and accountability on the part of the implementing authorities,
and the MPS in particular. By providing a detailed framework, procedures and
responsibilities for regulating overseas NGOs, the law seeks to limit the
discretionary power of the MPS even while it expands its administrative
authority and resources.

I
realize that this last point is not widely shared by many critics of the law
who see the law giving the MPS unlimited power over overseas NGOs. While I am
not a fan of this law, the critics’ view ignores the fact that Public Security
organs and local governments already have the authority to close down many of
the overseas NGO projects and offices in China that are unregistered or
improperly registered. In 2000, the MCA issued the “Interim Regulations for
Banning Illegal NGOs” that provided guidance to local authorities who were
unclear about how to deal with unregistered or improperly registered Chinese
and overseas NGOs working in their jurisdiction. As Deng Guosheng points out,
local authorities were given wide discretion over how to implement this
regulation which was much more ambiguous than the Overseas NGO Law[iv].
Over time, an unwritten understanding emerged among authorities to adopt a
hands-off approach towards these “illegal” NGOs unless they posed a real threat
to social stability or national security.

If
the Chinese leadership really wanted to make life difficult for overseas NGOs,
all they would need to do is issue a national directive or law to ensure that
this regulation was enforced. But that would be like using a cudgel whose
appearance would scare away many overseas NGOs. Instead the leadership chose to
use a more surgical instrument by creating a law that required overseas NGOs to
be transparent about their partners and funding, but also placed limits on the
discretionary authority of Public Security and other government agencies. The
intended effect, in my view, was not to drive NGOs from China but to corral
them into officially-sanctioned areas and away from more sensitive areas
working with grassroots NGOs working on rights protection, advocacy, religion,
etc. To a large extent, this was also the effect of the Yunnan regulations[v].

Getting
the intent of the law right is important because the MPS will be judged on its
performance in implementing the law so that it does achieve its intended
effect. If the intent of the law is truly to make life difficult for overseas
NGOs and encourage them to leave the country, then the MPS has an easy job to
do, and there is little that NGOs can do to shape implementation. But if the
intent of the law is to ensure that overseas NGOs are able to work legally in
officially-sanctioned areas, then the MPS has its work cut out for it and overseas
NGOs have some leverage to shape the law’s implementation by monitoring and
holding the MPS and other government agencies accountable for implementing and
enforcing the law in an effective and impartial manner.

[i] Shawn Shieh
and Signe Knutson, Special Report: the Roles and Challenges of International
NGOs in China’s Development, China
Development Brief (2012),
http://chinadevelopmentbrief.cn/publications/special-report-the-roles-and-challenges-of-international-ngos-in-chinas-development/.

Wednesday, December 21, 2016

The Overseas NGO Law passed in April stated that a directory of Professional Supervisory Units (PSUs, 业务主管单位) would be made public. These PSUs (or in the official English-language translation of the Law "organizations in charge of operations") are important for those overseas NGOs that wish to register a representative office, but are not necessary for NGOs that only wish to carry out "temporary activities." In order to register a representative office, the NGO first needs to get the approval of a PSU that is willing to supervise its operations in China.

So far, no official English-language translation of the directory or the Guidelines has appeared.

It is interesting looking at the list of PSUs and the list of major fields/projects, how many areas are on the list. The major categories are Economics and Trade, Education, Science and Technology, Culture, Health, Sports, Environmental Protection, Emergency Assistance and Disaster Relief, and Other. Each of these categories has subcategories. Under Other, we find interesting subcategories such as: Legal Services; Women and Gender; Union work (which is limited to union research and exchange); and Social Organization (the official term for nonprofits and NGOs) Research, Exchange and Collaboration.

The list of PSUs is pretty conventional, full of government agencies working in the above major fields. There are also a few mass organizations like the Women's Federation, Disabled Persons Federation and All-China Federation of Trade Unions. I would have liked to see a more expansive list that included universities and research institutes, and it looks like there is room for changes in this directory, as an explanatory note in the directory states that it will be revised in the future.

The critical issue is whether these PSUs will be willing to supervise overseas NGOs. In the past, the difficulty of finding a willing PSU was the main
obstacle to overseas NGOs seeking to register a representative office. This was the main reason that, of the hundreds of overseas NGOs that had offices in China, only around 29 were able to register a representative office with the Ministry of Civil Affairs between 2004 to 2016.

There is no reason to believe that PSUs will be more willing now to supervise NGOs under the new Overseas NGO Law. Just because they are listed in this directory does not mean that they have an obligation to be a PSU. The 29 or so NGOs that have an existing PSU and have already registered a representative office with the Ministry of Civil Affairs will very likely have no problem transferring their registration to the Ministry of Public Security. But for the hundreds of other NGOs, there is no guarantee that they will be able to get the approval of a PSU.

Thursday, December 8, 2016

We are only 24 days away from the Overseas
NGO Law going into effect in China, and the only official news we have gotten
in the past two months are an October 14 meeting between the Public Security officials with
foreign NGOs (mostly business and trade groups) in Shanghai to
announce draft Guidelines for the law, a November 8 meeting in Shanghai between Public Security
officials and foreign consulates (the subject of this post), and the release of the final
official Guidelines.

A summary
of the November 8 meeting, the official
Guidelines (境外非政府组织代表机构登记和临时活动备案办事指南) in Chinese, and the official English
langauge-translation of the Overseas NGO Law are now available on the
Ministry of Public Security (MPS) website.There is so far no official English language translation of the
Guidelines, although there is an unofficial translation available on ChinaLawTranslate, and on the WeChat
account of FORNGO which bills itself as a center that provides
“professional legal services for assisting overseas NGOs with registration of
overseas NGO offices, application of filing the record of temporary activities,
etc.”.

The remainder of this post is about the
November 8 meeting between the MPS and Shanghai PSB and 11 foreign consulates[1]
about preparations for the implementation of the Overseas NGO Law.Several questions were raised at the meeting,
particularly (1) whether there would be a "grace period” to give overseas
NGOs time to comply with the law, (2) whether NGO representative offices could
carry out activities across provinces, and (30 how overseas NGOs with
activities in different sectors would determine their professional supervisory
units (PSU) or as they are referred to in the Guidelines, business
administration departments (BAD).

Before answering these questions, the MPS
representative in charge of the Overseas NGO Management office (公安部境外非政府组织管理办公室) made a several statements that were similar to those given at the
October 14 meeting.

1) The MPS was giving high-level attention
to the work of servicing and managing Overseas NGO and providing efficient and
convenient services, and was making intense preparations to ensure that the law
would be effectively implemented on January 1, 2017.

2) The coordination mechanism for FNGO supervision
and management work had already been established with the MPS and other
relevant PSUs participating, to research, coordinate and solve major problems
in supervision, management and services for overseas NGOs carrying out
activities in China.

3) Provincial Public Security Bureau’s
(PSB) Entry/Exit offices were setting up counters for handling registration. In
order to provide guidance and help to overseas NGOs seeking to register a
representative office or file a record for “temporary activities”, relevant
standard documents were being formulated, including the Guidelines for
Registration of Overseas NGO Rep Offices and Filing of Records for Temporary Activities
《境外非政府组织代表机构登记和临时活动备案办事指南》, and a
Catalogue of Overseas NGO Sectors and Project Areas and Directory of PSUs 《境外非政府组织在中国境内活动领域和项目目录、业务主管单位名录》.

4) An information system and website was
being established for overseas NGO management services so that overseas NGOs
can go on the website to handle matters and make appointments for registration
and filing of records, and apply and submit relevant materials online. Relevant
guidance materials would also be published online.

5) The MPS would work together with the
Ministry of Civil Affairs (MCA) and State Administration of Industry and
Commerce (SAIC) to transfer the registration of those overseas NGO representative
offices registered with these two agencies to ensure a smooth transition to the
new management framework and protect the legal rights of these overseas NGOs.

This last item refers to the 29 or so
overseas NGOs which have managed to register representative offices with the
MCA under the 2004 Foundation Management Regulations, and those overseas NGOs
that were unable to register representative offices with MCA but were permitted
to register representative offices of companies with SAIC.

With regard to the questions posed above, the MPS
spokesman provided the following responses.

About the question on the grace period, he
replied that "China is a rule of law country, and any laws that go into
effect will not have any grace period. When the Overseas NGO Law was passed on
April 28, with the aim of going into effect on January 1, 2017, legislative
bodies already considered this was a new law and allowed eight months for a
preparation period to issue guidelines and catalogues for sectors and projects
and a directory of PSUs. He also stated that as soon as the law went into effect,
the activities of overseas NGOs and their representatives in mainland China
that were registered or recorded would receive legal protection.

Regarding whether overseas NGO representative
offices could undertake activities across several provinces, he stated that
based on Article 10 and 13 of the Law, FNGOs could set up one or more representative
offices in China, and at the time of registration should confirm the geographic
area for the activities carried out by that office. A representative office would
be allowed to carry out activities across different provinces. For overseas NGO
that set up two or more rep offices, the activities of these offices should not
overlap or duplicate each other.

Regarding the question of how overseas NGOs
that work in different sectors or fields would determine their PSU, he stated
that currently they are working on a catalogue of overseas NGO sectors and projects
and a directory of PSUs to provide clarification and detail on PSUs in the
areas of economy, education, science and tech, culture, health, sports, environmental
protection, humanitarian assistance, disaster relief, etc. He noted that “for
overseas NGOs working in multiple sectors/fields, the MPS is proposing that
overseas NGOs determine its PSU based on their primary or major field of
activity. For the overseas NGO's other fields of activity, the main PSU can consult
with other relevant departments which should actively cooperate to ensure the
management and service work is carried out, and ensure that the overseas NGO is
complying with the law in carrying out activities in those issue areas.”

He did not elaborate on how exactly this
proposed arrangement and coordination between the “main PSU” and other relevant
departments would work in practice.

In closing, the MPS spokesman emphasized
that over the last 30 years of reform and opening, China's economic development
and international influence have grown, and overseas NGOs have played a
positive role in that process by bringing in projects and funds, diverse ideas,
advanced technologies, and valuable experiences. In doing so, they have promoted
friendly exchanges between China and other countries, and made a positive
contribution to China's economic and social development. China's government
continues to welcome and support overseas NGOs to come to China to develop
cooperation and exchange programs. The MPS would firmly carry out its work
according to the law, carry out its services and management work according to
the law, and would work hard to provide assistance and services to overseas NGOs
engaged in exchange and cooperation with China.